Rake blames lawyers for missing out on Andersen

Rake blames lawyers for missing out on Andersen

KPMG's legal advice on acquiring troubled firm 'proved to be wrong'

KPMG senior partner Mike Rake has said that his greatest disappointment is
not buying Andersen.

In a wide-ranging and frank interview with Accountancy Age this
week, Rake looked back on eight years in his job and said he wished he had
relied less on legal advice and bought Andersen in 2002.

‘My biggest single disappointment is that I would have liked to have seen us
taking on Andersen in the UK. The legal advice we got proved to be wrong.’

KPMG and other firms were advised that Enron investors might seek to sue
firms that took on Andersen for damages incurred. Deloitte, which took on
Andersen UK, has never seen any legal action as a result of Enron.

Separately, Rake declares that his successor will see KPMG overtake Deloitte
‘in the next couple of years’, and challenges the profession’s next generation
of leaders to resolve the issue of regulation.

‘We have to have strong independent regulation of the profession. You can’t
have the institute. It tried to be a trade association and a regulator. Bluntly,
I think it failed at both,’ he said.

Rake also offers advice to the leaders of mid-tier firms on how to challenge
the Big Four, a process that, if it happens, will take ten years at least, he
says.

Rake will step down as senior partner in September, but remain international
chairman.

Of his future plans, he said: ‘Family life might be one option. I would like
to get some balance [back]. Something with an international background would be
interesting.’

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